Scenario Governance: From Spreadsheets to Versioned Packs

It's 3 AM and you're staring at three different Excel files: Wind_Farm_Analysis_v2.xlsx, Wind_Farm_Analysis_FINAL.xlsx, and Wind_Farm_Analysis_FINAL_APPROVED_USE_THIS.xlsx. The investment committee meeting is in 6 hours, and you have no idea which assumptions are current.

Sound familiar? You're not alone. According to a 2023 EY survey, 73% of energy companies report "significant challenges with scenario consistency" across their investment process. The culprit? Ungoverned spreadsheet chaos.

This article explains how data contracts and scenario pack versioning can transform your investment process from Excel archaeology to confident, reproducible decisions.

The Spreadsheet Problem: A $100M Miscommunication

In 2019, a major European utility almost green-lit a €100M battery storage project based on outdated power price assumptions. The Excel model used Q2 price forecasts while the market had shifted dramatically in Q3. Only a last-minute audit caught the error.

The root cause wasn't human error—it was systemic lack of scenario governance:

• Version confusion: Multiple Excel files with similar names
• Assumption drift: No clear change tracking for key parameters
• Review chaos: Email chains with conflicting "final" versions
• Audit nightmares: No clear lineage from input to output

"We had investment memos based on three different LCOE assumptions—and nobody knew which one was approved by the committee." — CFO, 2GW Renewable Portfolio

What Are Data Contracts?

A data contract is like a software API, but for financial assumptions. It defines:

• Schema: What parameters must be present (power price, WACC, etc.)
• Types: Data formats and validation rules
• Governance: Who can approve changes and when
• Lineage: Complete audit trail from source to calculation

Instead of hunting through Excel cells, you get a structured, versioned interface:

Three Types of Data Contracts

Scenario Pack Lifecycle: Draft → Review → Frozen

Think of a scenario pack as a complete set of assumptions for a specific investment decision. Each pack follows a controlled lifecycle:

1. Draft Stage

Analysts build and modify scenarios freely. All changes are tracked, but the pack remains flexible for exploration and refinement.

2. Review Stage

Pack is locked for stakeholder review. Comments and feedback are captured, but no direct edits allowed. This prevents the "I thought we agreed on..." problem.

3. Frozen Stage

Investment committee approves the pack. All parameters become read-only with complete audit trail. Any future changes require a new pack version.

Audit Requirements: What Banks Actually Check

When preparing project finance documentation, lenders focus on four key governance areas:

1. Assumption Traceability

• Can you trace every input back to its source?
• Who approved each assumption and when?
• What's the update frequency for market-dependent parameters?

2. Scenario Consistency

• Do all models use identical base case assumptions?
• How are scenario variations documented and approved?
• Can you reproduce results from archived scenario packs?

3. Change Management

• What triggers assumption updates?
• Who has authority to modify frozen scenarios?
• How are material changes communicated to stakeholders?

4. Version Control

• Complete history of all scenario pack versions
• Diff reports showing parameter changes between versions
• Ability to rollback to previous approved states

"The ability to export complete audit trails cut our due diligence time by 40%. Everything was transparent and traceable." — Project Finance Director, Major European Bank

Implementation Roadmap: From Chaos to Control

Week 1-2: Assessment & Planning

• Inventory existing Excel models and assumption sources
• Identify key stakeholders and approval processes
• Define data contract schemas for your project types

Week 3-4: Pilot Implementation

• Start with one project type (e.g., solar PV)
• Create initial scenario packs with version control
• Train team on pack lifecycle (draft/review/frozen)

Week 5-8: Scale & Integrate

• Expand to additional project types
• Integrate with existing approval workflows
• Build audit export capabilities

Week 9-12: Optimize & Govern

• Establish regular scenario pack review cycles
• Create dashboard for assumption monitoring
• Train investment committee on new governance process

Results: What Good Governance Delivers

Companies that implement scenario governance typically see:

• 50-70% reduction in investment memo preparation time
• Zero audit queries on assumption consistency
• 100% reproducibility of historical calculations
• 25-40% faster due diligence processes

But the biggest benefit is confidence. When your CFO can look at an investment decision and know exactly what assumptions drove the recommendation, you've achieved true governance.

Next Steps: Building Your Scenario Governance

Ready to eliminate spreadsheet archaeology from your investment process? Here's what to do next:

1. Start small: Pick one project type and define its data contract
2. Establish roles: Who can create, review, and approve scenario packs?
3. Document everything: Every assumption needs a source and approval trail
4. Test the audit: Can you export complete documentation in under 10 minutes?

The goal isn't perfect data—it's governed data. When everyone knows which version is current and who approved what assumptions, you can focus on making better investment decisions instead of hunting through email chains.

Because at 3 AM, you should be sleeping—not playing Excel detective.